Govt lowers interest rate on General Provident Fund

New Delhi: After facing economic challenges due to the threat posed by coronavirus pandemic, the government has lowered the rates of interest of General Provident Fund (GPF) and other similar funds, which will carry now an interest rate of 7.1 per cent for the period April 2020 to June 2020.

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The GPF interest rate from January 2020 to March 2020 was 7.9 per cent.

“It is announced for general information that during the year 2020-2021, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 7.1% w.e.f. 1st April, 2020, to 30th June, 2020,” the Ministry of Finance said in a notification.

The GPF rules are applicable to those central government employees who have been appointed on or before December 31, 2003. The employees can also nominate someone at the time of opening their account. The lower interest rate will be applicable on provident funds of central government employees, railways and defence forces.

Other funds eligible for the benefit include the Contributory Provident Fund (India), the All India Services Provident Fund, the State Railway Provident Fund, the General Provident Fund (Defence Services), the Indian Ordnance Department Provident Fund, the Indian Ordnance Factories Workmen’s Provident Fund, the Indian Naval Dockyard Workmen’s Provident Fund, the Defence Services Officers Provident Fund, and the Armed Forces Personnel Provident Fund.

In March 2017, the government relaxed the norms for withdrawal of GPF, which will allow subscribers to receive payments within 15 days. As per the new rule, employees can also withdraw the fund for select purposes after completing 10 years of service, as against 15 years of service earlier.